Presenting the revised fiscal budget for 2015, Finance Minister Siv Jensen said that the sharp oil price decline since last year is dampening growth in the Norwegian economy. Growth in the mainland (or non-oil) economy is set to be moderate in 2015, and some competitive businesses must adapt to lower demand from the Norwegian petroleum sector.
She said these adjustments are likely to happen earlier than previously anticipated due to the oil price decline.
“Lower demand from the petroleum sector will pose challenges to the Norwegian economy. Our economic policy helps the economy meet these challenges,” the Finance Minister said.
The 2015 Fiscal Budget took important steps for a new economy policy for Norway. The budget promotes growth in the Norwegian economy through targeted tax reductions, high priority on infrastructure and emphasis on other measures to stimulate productivity and competitiveness.The Revised 2015 Fiscal Budget continues along this path by, inter alia, increasing transfers to local governments and with measures to support the labour market.
The Norwegian mainland economy is forecast to grow at 1.3 per cent this year and 2.0 per cent in 2016. Growth at this rate would be below the average growth rate of the last four decades. Declines in investments in the petroleum sector and moderate growth in household consumption are expected to weigh on growth this year. On the other hand, expansionary fiscal and monetary policies, and a depreciation of the Norwegian krone, provide significant impulses to demand.
Employment growth has moderated and the unemployment rate increased in April. The registered unemployment rate currently stands at 2.9 per cent.